=economics =investment =projects =chemistry
So, Sam Altman wants as much
money as he can get - the number he chose to give was $7 trillion - to build
more chips for AI as fast as possible. Including in places like the UAE.
Thus undermining his argument that OpenAI is helping with AI safety by
preventing overhang and maintaining a lead for America, which was never a
good argument anyway.
Well, I warned some people about him. To avoid
getting fooled by bad actors, you have to avoid getting fooled by good
actors. (In Altman's case, I had the advantage of more information about him
making conflicting statements to different people.)
Anyway, this got
me thinking about how I'd spend $7 trillion dollars. Such large numbers get
hard for people to understand; you can say it's about $1000 per person
alive, but giving it away equally isn't in the spirit of the challenge here.
No, the point here is imagining megaprojects and massive economies of scale,
to grapple a little bit with the enormity of trillions of dollars.
So, the below is how I'd spend that kind of money in useful ways. Much of
this is stuff that'll happen anyway, and listing that is sort of cheating,
so I guess I'll aim for over $7 trillion, and when I know someone with a
notable possible improvement to something, I'll mark that with a *.
solar
Doing work requires
energy, and the modern trend is towards electrification. The world is now
generating an average of ~3.5 terawatts of electricity. Making 2 terawatts
of average solar power generation seems pretty reasonable. With single-axis
tracking you can get maybe 30% capacity factor, so that'd be 6.7 TW of solar
panels. Anyway, at least $1 trillion of capital investment in solar panel
production seems justified, and that's a good start on spending all that
money.
If you just want a big enough production complex to hit the
limits of cost scaling, that's a lot cheaper, probably a mere $100 billion.
The "Inflation Reduction Act" probably would've made more sense if it funded
a big solar panel complex instead of stuff like subsidies for water
electrolysis (which is a dead end for at least a few decades) and rooftop
solar (which is expensive and dumb).
PV panel production includes:
- making
silicon metal
- making SiCl4 and distilling it for purification
-
reaction with hydrogen
- slicing thin layers with diamond-studded wire
saws
- treatments including doping
- application of ITO transparent
conductor* and wires
The vast majority of solar panel
production is done in China. It doesn't involve a complex supply chain like
electronics production in Shenzhen. It's highly automated and shouldn't
depend on low labor costs. Why, then, is it cheaper to make solar panels in
China than America? My understanding is, that's because building the
facilities is more expensive in America. The machines used are about the
same prices, so the difference comes from things like land, regulations,
building construction, welding pipes, and management costs.
Why is
that? Why is making manufacturing facilities more expensive in America?
Maybe because everything is more expensive in America! If you have a choice,
if you aren't bound by the locations of real estate or natural resources or
funding sources or existing equipment, it seems like it's only worth doing
something in America if the cost of doing it doesn't matter much.
In
other words, I think the problem with making (exportable) stuff in the USA
is largely currency values. The PPP/nominal GDP of Japan is 1.5x that of the
US, Poland is 2x, and can you really justify building a factory in the US if
you get 1/2 as much factory for your money? Similarly, it's a lot cheaper to
get surgery in Mexico instead of the USA, or go for a long vacation in
Thailand.
grid storage
Sunlight is
inconsistent. So, having generated electricity with solar panels, it may
need to be stored until it's needed.
Grid energy storage is more
expensive than adjusting the timing of hydropower or burning natural gas.
It's "too expensive" - but that just means it's more expensive than current
generation, and people in California are paying literally 10x the cost of
generation for electricity, 3x what people in other states pay. If
electricity generation costs were really as important as some bloggers seem
to think, California would be abandoned.
Reasonable people talk about
reducing global warming and improving energy security in terms of minimizing
mitigation costs and maximizing what can be done with how much people are
willing to pay, but a lot of investors and governments seem to want to hear
"this is cheaper AND it reduces CO2 AND it improves energy security" and
will invest in delusional people who tell them that. It's illogical: adding
extra constraints has costs.
People drawing straight lines to project
future Li-ion battery costs were dumb. The best ways to do grid energy
storage are:
- compressed
air in underground caverns*
- chelate flow batteries*
- power-tower
solar-thermal* with integrated heat storage and possibly underground
compressed air storage
For compressed air energy
storage, water-compensated systems seem worthwhile.
Flow batteries
are currently too expensive; cheaper membranes* would be needed to make them
competitive, but those are possible. Very-large-scale production of the
organic ligands* would also be needed.
Solar-thermal would only be
practical in particularly sunny areas with electricity demand. Better
designs than existing plants are necessary.
I could see $4 trillion
of such energy storage being justified worldwide, but that depends on things
like CO2 valuations, natural gas prices, and politics.
HVDC
Having supplied
electricity at the right time, it needs to go to the right places. The best
way to move electricity long distances is with HVDC lines. That requires:
-
high-voltage transformers
- AC-DC conversion*
- land rights
-
aluminum wires
At least $200 billion of investment worldwide on HVDC conversion and lines is probably justified. But there are some points to note:
- Getting
land rights can be difficult, especially in the USA.
- Fuel pipelines are
a more-efficient and cheaper way to move energy than HVDC lines.
- HVDC
transmission alone isn't a good solution to inconsistency of solar power.
Here's an influential paper concluding that:
US power consumers could save an estimated US$47.2 billion annually with a national electrical power system versus a regionally divided one (~1.1¢/kWh). This amounts to almost three times the cost of the HVDC transmission per year.
Here's further analysis, concluding that $400B of investment in HVDC transmission and $2 trillion in new generation is justified.
batteries and supercapacitors
Having supplied electricity at the right time and place, it may need to
be supplied to something moving with batteries, or provided as pulses from
supercapacitors.
The battery market is now dominated by Li-ion
batteries*. There are other potential battery chemistries*, but most of the
ones I see news articles about are obviously not competitive. (Like with
stories about potential "cures for cancer", most people eventually stopped
believing them.) Anyway, at least $2 trillion of capital investment in
battery production seems justified.
Flywheel systems used to be
cheaper than supercapacitors*, but costs are now similar, and I suspect
supercapacitors will end up outcompeting them. For mobile robots in
factories & warehouses that can be recharged frequently, supercapacitors are
competitive with Li-ion batteries; both options work fairly well.
motors
Having supplied
electricity to the right place, it must be converted to something else,
usually mechanical power. Economic growth and replacement of engines with
electric motors means more motor power per person will be needed.
At
least $1 trillion of investment in electric motor production is probably
justified. I expect more usage of axial-flux permanent magnet motors* in
high-performance applications and more switched reluctance motors* in
cost-sensitive applications. Both would need grain-oriented electrical
steel*.
power electronics
To drive
electric motors, electricity must be converted to the right voltage and
frequency. Some motors are directly connected to an AC grid, but most
applications require variable speed which requires power electronics.
Motor driver circuits* typically use semiconductor switches on special
circuit boards with thick copper. They used to use silicon MOSFETs and
IGBTs, but electric car makers are moving to SiC switches. I think GaN*
and/or SiC will mostly displace silicon for motor drivers. Research on
production GaN crystals using physical vapor deposition, ammonothermal
methods, and sodium flux methods is ongoing.
Like motor production,
at least $1 trillion of investment in production of power electronics is
probably justified.
copper
Transformers and
motors need copper. The world is currently producing >$150 billion of copper
a year, and continuous investment in new mining projects is needed.
actuators
Having produced
mechanical power with electric motors, it needs to be converted to the
desired forms. Most applications require higher forces at lower speeds than
electric motors provide. The basic types of actuators are gears* and linear
actuators*, and both are needed. I tend to further divide each into these
subtypes:
- high-force
(for heavy equipment / presses / etc)
- precision (for robotic arms /
etc)
- miniature
Notable current actuator types include:
- planetary
gears
- cycloidal drives
- strain wave gears
- belt and chain
drives
- ball screws
- roller screws
- hydraulic pumps and
cylinders
The relative cost of actuators
and electric motors varies greatly, depending on speed & size & precision.
A world with more electromechanical actuators per capita is also a world
that needs more roller bearings. Well, the CAGR of roller bearings is
expected to be higher than GDP growth. Current bearings work well and I
don't expect much about them to change, but maybe we'll see more ceramic
bearings in the future...? I think spark sintering makes silicon nitride
bearings a bit cheaper...or maybe Sialon-TiN microwave sintering will
outcompete that? That's not my area of expertise so I can't say; what I do
know is that not having to replace stuff because ball bearings wore out
would be nice.
How big a market is this? Well, the global market for
robotic arms is currently ~$30 billion/year, which seems small relative to
their economic significance, but if having a robotic arm in homes becomes
common, that'd probably be more than $1 trillion dollars of actuators. And if
some superintelligent AI takes over and replaces humans with robots, that'd
be an even bigger market!
Then there's heavy equipment; I expect
future excavators to use electric motor driven actuators, and you can look
at the global sales of hydraulic equipment, which is currently larger than
but comparable in scale to the robotic arm market. (By the way, both of
those together are currently smaller than the video game market.)
biomass
Liquid fuels have
higher specific energy than batteries, and that's necessary for some
applications. Also, refuelling is faster than recharging, and liquid fuels
can provide long-term energy storage. Making liquid fuels from biomass is
much cheaper than trying to make them from electricity. It's potentially
cheap enough for its CO2 mitigation cost to be among the lowest. Also, there
isn't enough arable land to produce all the energy currently used by
civilization from biomass.
Converting biomass to higher-value
chemicals is better than making fuels. The processing of biomass to
chemicals* generally costs more than the biomass used, and only low-cost
processing is practical. (Sometimes I see an article about people using
plasma or something to process biomass or waste, and...sure, you can do
that, but it's far too expensive.) Heating up biomass in water can produce a
mix of:
- furfural
(can be used for furfurylated wood & bamboo)
- levulinic acid (usage*
would be complicated)
- hydrochar (similar to coal, can be burned or
buried)
With a good process for such conversion, and development of good uses for furfural and levulinic acid, growing over a billion dry tons of biomass worldwide for that a year seems plausible. (In general, I like specially-bred Miscanthus sinensis as a choice for on-purpose biomass production for conversion to chemicals.) In that case, at least $200 billion of capital investment in such biomass conversion plants seems justified. That would involve many medium-size plants to reduce transportation costs, rather than a few large plants.
methanol
Currently, over
100 million tons of methanol is produced per year; prices vary but $300/ton
is typical. The main uses are formaldehyde (for urea-formaldehyde resins)
and gasoline additives.
Rather than those uses, what I imagine
expanded methanol production being used for is: dimethyl ether as a fuel for
diesel engines, and fermentation to chemical intermediates. Dimethyl ether
works with existing diesel engines, but has lower energy density and
requires pressurized tanks. Useful fermentation of methanol would require
better engineering of microbes for synthetic methylotrophy*.
If
conversion of diesel vehicles to use dimethyl ether (to reduce air
pollution) is pursued, OR suitable engineered microbes are developed, at
least $100 billion of capital investment in methanol production seems
justified.
plastics
With all the
backlash against plastics, global production of plastics has...continued
increasing rapidly, of course. (Bans on plastic straws and plastic bags
aren't significant, and they're completely unnecessary since biodegradable
plastics work fine for those uses at negligible extra cost.)
I
generally divide future commodity polymers into these categories:
- strong
thermoplastics*
- biodegradable thermoplastics*
- resins*
-
thermoplastic elastomers*
- strong polymer fibers*
Overall, at least $500 billion of
capital investment in plants for making polymers (and their monomers) seems
justified.
An example of a future commodity plastic would be,
hmm...(biphenyl-4,4′-dicarboxylic acid + ethylene glycol + butanediol) which
can give bulk thermoplastics with >250 MPa tensile strength as well as
strong melt-spun fibers. I've seen a few routes* to that, some cheap enough
to justify enough production for that to justify $500 billion of capital
investment by itself, but I'm not sure if companies will figure them out.
By the way, some uses of polymers I expect to grow relatively fast
include:
- poly(lactic
acid) modified by chain extenders* for biodegradable plastics
- EconCore
type panels
- specialized resins for 3d printing for lost-resin casting*
a new city
Supposing
there's more production of stuff like plastics and furfurylated wood, maybe
some of it should be used for construction.
Some people think America
should pack millions more people into New York City and San Francisco, but
I'm not convinced that their high average wages mean that marginal wages
of additional people would be high. Personally, I think it makes more sense
to make a new city somewhere.
Ideally, you want some place with:
- a decent
climate
- flat land for building
- a possible seaport within a few
hours of driving
- some existing cities within a few hours of driving
Maybe some place south of Raleigh
NC would be reasonable?
Supposing you want at least $100k of
buildings per person and 1 million residents, that's already $100 billion,
and I'm sure it's possible to spend more than that.
America already
has cheap housing in dying cities; if building more in a new location, there
has to be a reason beyond "more housing", such as:
- better
climate
- better access to a port or highways
- better road layouts*
achievable with greenfield projects
- reaching some minimum scale
I've seen some people say the entire population of Taiwan should be relocated to a special region of the USA; that would certainly be a project that costs trillions of dollars. That doesn't seem plausible to me, but I could certainly imagine a couple million Taiwanese wanting to emigrate.
investment decisions
Adding
up the numbers above...yep, almost certainly over $7 trillion. Mission
accomplished.
Of course, this isn't how resources actually get distributed. China does have a more top-down approach that's a bit
closer to this than what happens in the USA, but that's still not an
integrated analysis. Rather, the Chinese leadership chooses a set of
strategic goals, and they distribute those to people, who further divide and
distribute goals. For example, the Chinese gov decided it wanted to: be able
to take Taiwan -> deter US intervention -> have better nuclear threats ->
build more nukes and develop maneuvering hypersonic vehicles -> build
nuclear plants and a hypersonic wind tunnel like JF-22. It decided AI would
be important, and then that turned into a bunch of project branches.
In the US, on the other hand, CEOs and executive directors make most of the
investment decisions. They might read magazines saying that "cloud and
blockchain and IoT" will be important, and talk to other executives at
conferences who agree with that view, and then make a statement saying their
company "will be a trend leader for emerging technologies including cloud
computing and blockchain". Then they delegate the technical details to a
guy, who hires a consulting firm, who finds someone who social consensus
says is probably knowedgeable. A Nobel-winning scientist like Gregg Semenza
would obviously be the best possible expert, but that's not necessary; it's
better to find a professor whose work seems relevant, and hire them and some
guy from Guidepoint for a few hours of consultation that Harvard grad
employees can compile into a technical report.
The US government is
presumably less involved in the economy than China's, but between the
federal + state + local governments, spending is around 1/3 the economy.
Much of that is payments to individuals and hospitals, but how does
something like IRA subsidies for water electrolysis happen? From the point
of view of the non-technical leadership, there's an overall consensus that
electricity to hydrogen is viable in the near future. That implies that it
just needs tech development. Legislators make deals and work out how much
they want to spend on different things, and then congressional staff are
supposed to work out good ways to use some amount of money with some
restrictions. (Those congressional staff studied political science and their
job experience consists of being a congressional intern.) So they ask their
economics experts about how to efficiently encourage the relevant tech
development, and they decide to temporarily subsidize different routes to
hydrogen at slightly below their current extra costs. (I understand, but
still, for me it's like watching video of a toddler trying to stick things
in outlets.) And then, since there's no immediately-visible solution to the
high costs, companies try to find loopholes instead of spending on research.